Blockchain Could Help Content Generation Industry Be More Profitable

Chinese language content material era platform TikTok, a video-sharing app that has been known as the fastest-growing social networking service in historical past, has been within the highlight since early 2019 and now surpasses 800 million customers. Even though the app’s information safety breaches are elevating controversy worldwide, increasingly younger individuals are utilizing it because the go-to social media for the brand new era, with a reported 69% of TikTok’s world viewers being between the ages of 16 and 24.

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Regardless of its overwhelming success and quickly rising consumer base, the reality behind the worldwide sensation is that “the brand new Instagram” is hardly worthwhile. One of many key causes behind it’s IT infrastructure prices — and blockchain may need the answer.

Tackling profitability challenges

At present, nearly all of content material creation and short-video platforms like TikTok have loads of bills and two main income streams: promoting and e-commerce. The latter is barely fashionable in China. TikTok’s mother or father firm, ByteDance, was capable of pull off billions of {dollars} in revenue resulting from its easy integration with all main e-commerce platforms in China. On the subject of the advert income mannequin, it has confirmed to be environment friendly in the USA by Google-owned YouTube and Amazon-owned Twitch, which leverage the advert optimization algorithms of their mother or father firms.

Each YouTube and Twitch are additionally using the idle servers of Google Cloud or Amazon Net Providers. This makes them an exception amongst related platforms that should pay thousands and thousands of {dollars} for bandwidth and information storage, that are the primary bills for any video content material era platform. YouTube, particularly, has been leveraging Google peering for nearly free bandwidth. That is particularly related for firms in China the place bandwidth prices are very excessive resulting from the truth that nearly all of information facilities belong to state-owned telecommunications firms.

As increasingly customers search for high-quality movies in 4K decision and at 60 frames per second, servers and consumer acquisition prices for user-generated content material platforms develop exponentially. Again in 2011, Tudou — the “Chinese language YouTube” — reported in a monetary assertion that its bandwidth bills had been $28.6 million U.S. {dollars}, which accounted for 42.1% of its value of income. With 227 million month-to-month distinctive guests on the finish of 2011, that equates to 7.9 distinctive guests monthly per greenback spent on bandwidth. Almost a decade later, Bilibili — one other Chinese language counterpart of YouTube — reported in its 2019 annual monetary assertion that it spent $132 million on servers and bandwidth and had 130 million energetic month-to-month customers, which means it had solely barely lower than one month-to-month consumer per greenback spent. Each firms, in addition to “Chinese language Instagram” Kwai, are at the moment having a really laborious time turning a revenue.

TikTok, with its 800 million month-to-month energetic customers importing thousands and thousands of movies each day — 500 million customers inside China and 300 million elsewhere — takes this problem to an entire new degree. With an estimated information consumption of round 6.9 exabytes (over 7,000,000 terabytes), it must spend roughly $eight million only for content material supply infrastructure monthly, in accordance with software program growth firm Trembit. With its monetization technique nonetheless not discovered, such breakneck prices could be a big impediment on TikTok’s option to profitability.

Decentralized storage as the answer

At the moment, the cloud computing market, which is estimated to be price $364 billion by 2022, is the first resolution for big information storage around the globe. It’s largely dominated by public clouds similar to Amazon Net Providers, Microsoft Azure and Google Cloud Platform that retailer their shoppers’ information in their very own information facilities.

On the identical time, in accordance with analysis carried out by McKinsey & Firm in 2008 and by a researcher at Stanford and a companion of Anthesis Group in 2015, 30% of servers in information facilities around the globe are “functionally useless,” which suggests they’re energetic and obtainable however haven’t been utilized in six months or extra. This infrastructure continues to be consuming energy, which suggests a steady drain for its homeowners.

Simply think about if TikTok was ready to make use of these idle servers to retailer its video content material around the globe — at a a lot decrease value than any public cloud. That is precisely what computing on the blockchain permits.

Decentralized computing goals at utilizing idle servers to retailer consumer information that’s damaged into smaller chunks and immutably saved throughout a number of nodes on a peer-to-peer community of suppliers, which may earn a living on in any other case loss-making servers.

This enables for a lot decrease storage prices for finish customers in contrast with the notoriously costly Amazon Net Providers and different public clouds. On high of that, utilizing present {hardware} limits one’s carbon footprint, which makes it probably the most ecologically sound resolution for cloud computing.

Eventually, we will anticipate enterprise distribution of some Net storage networks. Not solely will these networks resolve excessive storage value points, however they may also present content material distribution community companies just like Cloudflare.

If a whole bunch of 1000’s of nodes are distributed throughout all the most important metropolitan areas, we’ll see individuals and corporations gaining faster and cheaper entry to content material within the type of photographs, audios and movies.

Within the case of TikTok and Bilibili, using such a community may actually give the platforms a lift to probably flip worthwhile and be nearer to their customers — and grow to be a game-changer for the complete content material era trade.

What’s subsequent for the trade

Earlier than changing into a acknowledged various to fashionable public clouds and the selection of giants with a whole bunch of thousands and thousands of customers like TikTok, a “decentralized Amazon Net Providers” wants a viable trade use case. Decentralized internet hosting and administration of blockchain nodes — the equal of a platform-as-a-service resolution on high of public clouds — is certainly one of them.

Enabling the deployment of 1000’s of decentralized storage nodes at 100 occasions the pace, this know-how takes away substantial hours and prices from companies and builders — displaying the advantages of blockchain in cloud infrastructure and driving adoption throughout numerous industries.

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